Cardano price turns bullish, but is there substance to the ADA rally?

Cardano (ADA) experienced a remarkable price surge of 23.9% on July 13, leaving investors curious about the potential for further gains. This significant rally comes on the heels of a favorable judicial decision regarding XRP, leading many to question if ADA has what it takes to break above the $0.40 mark.

There are three reasons to support Cardano’s bullish momentum, including its potential to integrate other blockchains, increased activity in decentralized applications, and the decreased regulatory risk, although the latest XRP event requires a more cautious approach.

SEC actions specifically named ADA as a potential security

Cardano and its ADA token found itself in the spotlight as the Securities and Exchange Commission (SEC) referred to it as a potential security during the recent court action against Coinbase and Binance exchange. However, it’s important to distinguish that while the staking offering may be considered a security, it does not pose a direct risk to Cardano or its development companies.

Following the SEC’s remarks in June, ADA faced a 36% correction, dropping to $0.24. However, the recent XRP ruling on July 13 helped alleviate regulatory risks, leading to a boost in the rally of ADA and other coins impacted by the regulator’s comments.

The idea of implementing sidechains sparked additional interest

After a recent video shared by John Woods, CTO at Algo Foundation, Charles Hoskinson, co-founder of Cardano, proposed incorporating Algorand (ALGO) as a Cardano sidechain.

It might be prudent for Algorand to consider becoming a sidechain of Cardano. Always here to help. https://t.co/h3lQeF7WlK

— Charles Hoskinson (@IOHK_Charles) July 12, 2023

Although it may seem unlikely for the Algorand community to accept such a suggestion, the proposal gains relevance amidst AlgoFi’s shutdown announcement on July 11. The decision followed the SEC’s allegations of security-like characteristics against Algorand due to its ICO. This could provide a way for Algorand to avoid regulatory scrutiny, and it could also boost the adoption of Cardano’s ecosystem.

It’s worth noting that smaller altcoins could be incentivized monetarily to become a Cardano sidechain, leveraging Cardano’s rich treasury and marketing potential.

Increased activity in Cardano DApps and NFT markets

Smart contract activity plays a vital role in the success of blockchains designed for decentralized applications, especially as Ethereum…